At Sobel & Co, we are committed to continue authoring articles that offer you, our clients and business colleagues, a variety of timely and relevant information regarding new trends, opportunities and challenges facing the United State retail sector.  As we watch the evolving headlines and remain abreast of the latest news, we will provide you with information on a wide list of topics.  

Robotics well-established in warehouses

One development that you cannot ignore is the important advances that are being made today.  And the anticipation of what the future will bring, in technology and artificial intelligence.  The use of AI enhanced robotics in manufacturing and warehousing facilities has been well documented for years. In fact, author Corinna Underwood writes in “Robots in Retail,” that Amazon uses about 45,000 robots in their warehouses to fulfill orders. But the concept that robots are faster and more accurate than human employees when performing the commonplace ‘pick and pack’ supply chain function is wide spread throughout the entire industry and is not limited only to retail giants. Instead, small and mid-sized companies as well as large corporations around the world leverage the use of robots.

Robotics add value bringing the goods home

We have also touched on other types of robotics that are encroaching in this space.  Specifically we have wrote about the ‘early mover’ companies.  They are now turning to the use of drones for personal home deliveries – especially in the retail food niche, including drones in New Zealand bringing pizzas to the front door. Today’s early stage use of delivery drones is expected to open the flood gates for future use, but important regulations will need to be changed, and prohibitive laws will have to be adjusted, or lifted, to reflect this new use of air space. For more information about the use of drones for retail home delivery, please click here to read our article on this topic.

Robots have key tasks to perform in retail stores

Warehousing and home delivery aside, there are now other robotic opportunities that incorporate artificial intelligence to increase a company’s efficiencies and at the same time enhance the customers’ experience.

While we call them ‘robots’ they do not quite resemble Rosie, the famous humanoid maid who appeared as the fictional character in the TV show, Jetsons. For many of us, Rosie remains as the classic robot. While the robotics that are in place in wholesale distribution facilities and retail stores don’t seem as human as Rosie, they are perhaps even more effective.

Today’s in-store robots have important jobs to perform and the list is ever-expanding.  Although they may not have familiar human-like features, they are able to complete challenging new tasks as their roles continue to grow.  Most do not interact directly with consumers to engage in conversation as they might in a futuristic script.  However, modern retail workplace robots have key uses.

First, as store owners do their best to overcome or minimize the challenge presented by e-commerce, it is more critical than ever that in-store shoppers easily find the goods they seek. Empty shelves, products with wrong or missing labels, or even placed on the wrong shelf, can discourage consumers.  As a result stores increasingly use robots to manage in-store inventory. A robot that can quickly scan shelves to make sure that the products are in the right place.  And also that the inventory is adequate is essential for building and reinforcing a loyal consumer base.  A robot that gathers the data rapidly through sensors, can free up store employees to leverage the data and improve customer communications.

In addition, robots designed with expandable arms to reach the highest shelves can increase the way the stores use space. Most often shelves are not much higher than customers’ or employees’ reach – thus requiring more floor space and square footage. But if a robot can quickly and easily access elevated shelves built both vertically (including narrower aisles) as well as horizontally, the retailer can offer a robust array of on-site inventory of choices without requiring as much floor space.

Along with putting products on higher shelves, the robots can also assist customers by retrieving products behind glass cases. Best Buy in cooperation with PaR Systems tried this experiment and introduced their own robot, Chloe. Chloe operates behind a window-like partition where Best Buy keeps some of the more expensive items (movies, videos games, etc.).  Chloe uses a robotic arm to access items requested by customers. To learn more about this ‘arcade’ style Best Buy shopping experience, check out….  

The value of the reach and span of robotics in a retail environment cannot be diminished. “When it comes to the retail industry, shopper experience is everything. If a product is unavailable at the time the shopper wants to buy it, the retailer has missed an opportunity and disappointed their customer,” said Brad Bogolea, CEO and Co-Founder of Simbe Robotics in an interview with ZD Net regarding the robot “Tally” that they built for the big box retailer, Target.

It is obvious that using robots to manage in-store inventory creates the chance for a retailer to be more profitable.  While at the same time improves the customer experience.

But what other options might be on the horizons for the allocation of AI in a retail setting?

In 2016, Lowes in San Francisco began testing rolling kiosks to help customers find the goods they are seeking.  Customers can access the robot, dubbed, LoweBot,  by speaking directly to it or by implementing a touch screen. According to the report in Techemergence in “Examples of Real Industry Applications,”  the robot also identifies shopping patterns.  This helps the company understand not only which shelves need restocking, but also which merchandise moves most quickly.  Additionally it analyzes when it moves most quickly, including which days of the week or which seasons are most popular for each product.

At  they are tracking 140 of Japan’s Softbank Mobile Store’s use of, Peppercorn.  They programmed Peppercorn to converse with customers, give directions, answer questions, play music and even take selfies with customers. This sounds like a great customer gimmick.  But a Palo Alto tech retail store reported a 70% increase in foot traffic during the week Pepper worked there.  While a Santa Monica retailer claimed a 13% revenue increase when they had Pepper on site.

Will robotics really change the in-store experience?

One important note stands that people should not expect robots to take the place of store employees in regards to customer connections.

First, what robots are doing contributes to a more efficient customer experience.  They ensure appropriate inventory is present and available. They accomplish this by collecting data in real time.  In turn store owners and their leadership team can make educated decisions based on their own customers’ shopping demands.

Secondly the use of robots with expandable arms can alter the physical layout of a store.  Robots can assist customers by providing them with access to higher shelves and more costly items stored behind locked areas.  

Will robots replace people in the retail world?

For now, the answering is a resounding “no”.  Robots will play an increasingly important role in the retail world, both behind the scenes and in the stores.  Current evidence demonstrates that robots driven by AI excel in performing manual tasks.  Furthermore, their presence will actually increase the need for more human interaction in the marketplace.  Freeing up time from mundane tasks allows human employees to involve in far more important, thoughtful interactions with customers.  

Advice, guidance and insights are the domain of human employees.  Emphasizing this creates a win-win situation for both customers and retailers.

About the Author

John Mellage is a Member of the Firm. He has extensive experience in food + beverage, manufacturing/distribution, nonprofit, and construction. John's real-world, practical advice provides the firm's mid-size, privately-held clients with the knowledge they need to have a competitive advantage in the marketplace. Drawing on his deep knowledge gained by managing audits, compilations, reviews and other attestation engagements for clients of all sizes – from start-up entrepreneurs to established co...